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I know this will depend a lot on personal situation, but what should the thinking process be like? To pay back my loan and save enough money for retirement, I feel like I need to stay at biglaw for at least 8 years lol Would love to hear any personal stories!

There are honestly so many variables here (ranging from COL in your current market to personality) that there is no good answer here. But if you're unhappy in Biglaw, deal with the financial tradeoff of leaving for PI.

SFSpartan wrote:There are honestly so many variables here (ranging from COL in your current market to personality) that there is no good answer here. But if you're unhappy in Biglaw, deal with the financial tradeoff of leaving for PI.

I would say enough for a down payment on a house/apt wherever you see yourself settling down plus around 60k in cash. this is assuming your PI salary is enough to live off. buying property is the only thing in life that really requires a huge amount of capital (besides college) and I would use the biglaw salary to do this, and buying property means your building equity and you're not throwing money at some landlord. at that point I would say its fiscally responsible to leave.

SFSpartan wrote:There are honestly so many variables here (ranging from COL in your current market to personality) that there is no good answer here. But if you're unhappy in Biglaw, deal with the financial tradeoff of leaving for PI.

I would say enough for a down payment on a house/apt wherever you see yourself settling down plus around 60k in cash. this is assuming your PI salary is enough to live off. buying property is the only thing in life that really requires a huge amount of capital (besides college) and I would use the biglaw salary to do this, and buying property means your building equity and you're not throwing money at some landlord. at that point I would say its fiscally responsible to leave.

I get the logic behind this, but that's really not realistic for certain markets (in particular, NYC and SF/SF). In these markets, buying property is so expensive that it's effectively impossible to leave Biglaw and own property unless your partner makes bank. As well, not everyone needs to own property, though I certainly understand why property ownership is attractive.

SFSpartan wrote:There are honestly so many variables here (ranging from COL in your current market to personality) that there is no good answer here. But if you're unhappy in Biglaw, deal with the financial tradeoff of leaving for PI.

I would say enough for a down payment on a house/apt wherever you see yourself settling down plus around 60k in cash. this is assuming your PI salary is enough to live off. buying property is the only thing in life that really requires a huge amount of capital (besides college) and I would use the biglaw salary to do this, and buying property means your building equity and you're not throwing money at some landlord. at that point I would say its fiscally responsible to leave.

I get the logic behind this, but that's really not realistic for certain markets (in particular, NYC and SF/SF). In these markets, buying property is so expensive that it's effectively impossible to leave Biglaw and own property unless your partner makes bank. As well, not everyone needs to own property, though I certainly understand why property ownership is attractive.

completely disagree. you can get an apartment in manhattan for about 130k down. that should be doable for most midlevels I would imagine. Much less if you look in bk or queens. manhattan may not be worth it because your maintence fees will be so high, that your PI salary may not afford to pay a mtg + maintenance, but certainly NJ/BK is a viable option.

Maybe I'm looking in the wrong places. $130k down is 650, which will get you something, but I'm not sure if I would call it easy. Also, when I considered buying property, I kept running into insanely expensive monthly payments where the condo fees were as high, or higher than the mortgage, and a bunch of other ridiculous closing costs. And then my home owning friends swore up and down that Manhattan properties then to be so shoddily constructed and/or old that repair costs kept eating into their budgets. A lot of them say they wish they had just kept renting and put their money into other investments. (Though I guess we can't really buy stocks, so it's sort of questionable what other investments there are).

I've pretty much resigned to rent as long as I'm in NYC, but I'm sort of curious now whether I just encountered an overly pessimistic view of land-owning in Manhattan.

SFSpartan wrote:There are honestly so many variables here (ranging from COL in your current market to personality) that there is no good answer here. But if you're unhappy in Biglaw, deal with the financial tradeoff of leaving for PI.

I would say enough for a down payment on a house/apt wherever you see yourself settling down plus around 60k in cash. this is assuming your PI salary is enough to live off. buying property is the only thing in life that really requires a huge amount of capital (besides college) and I would use the biglaw salary to do this, and buying property means your building equity and you're not throwing money at some landlord. at that point I would say its fiscally responsible to leave.

This is pretty ridiculous and grossly oversimplifies the value of leasing versus purchasing real estate. You don't need to save enough for a down payment on real estate if you're miserable at a job.

The amount of savings you need depends entirely on your monthly expenses and your anticipated net (after tax) income. If your anticipated income will cover monthly expenses, and you will have no gaps with unemployment, then you can leave whenever you want.

If you are going to have a period where your monthly expenses are larger than your anticipated net income, then you need to save that difference over the course of a period of months until your net income is even with your monthly expenses. In other words, if current expenses exceed your anticipated income, you will have to reduce your standard of living, period.

If your anticipated income at your new job is unpredictable/volatile, you should probably have 6-12 months of monthly expenses saved up.

I've left a job twice. To think I would have to wait around to save for a down payment on a house, plus another $60k, is borderline absurd, and doesn't make any sense given the limited information provided.

the reality of the situation is someone working in PI will not be able to save anything. owning property is a savings mechanism as you pay down the principal and build equity. in several areas the renting price is around equal to the mtg + maintenance amount. so if you can use the biglaw salary to buy property, then quit, your monthly living expenses will be the same except you're also saving over the long term.

telling someone to quit as long as your income covers expenses is dumb. your advice is basically telling OP to just live paycheck to paycheck. which is fine if you have no choice, but certainly not advice you should be giving.

OP never mentioned anything about being miserable, it was purely an economics question. of course your mental health is not worth any amount of money.

SFSpartan wrote:There are honestly so many variables here (ranging from COL in your current market to personality) that there is no good answer here. But if you're unhappy in Biglaw, deal with the financial tradeoff of leaving for PI.

I would say enough for a down payment on a house/apt wherever you see yourself settling down plus around 60k in cash. this is assuming your PI salary is enough to live off. buying property is the only thing in life that really requires a huge amount of capital (besides college) and I would use the biglaw salary to do this, and buying property means your building equity and you're not throwing money at some landlord. at that point I would say its fiscally responsible to leave.

This is pretty ridiculous and grossly oversimplifies the value of leasing versus purchasing real estate. You don't need to save enough for a down payment on real estate if you're miserable at a job.

The amount of savings you need depends entirely on your monthly expenses and your anticipated net (after tax) income. If your anticipated income will cover monthly expenses, and you will have no gaps with unemployment, then you can leave whenever you want.

If you are going to have a period where your monthly expenses are larger than your anticipated net income, then you need to save that difference over the course of a period of months until your net income is even with your monthly expenses. In other words, if current expenses exceed your anticipated income, you will have to reduce your standard of living, period.

If your anticipated income at your new job is unpredictable/volatile, you should probably have 6-12 months of monthly expenses saved up.

I've left a job twice. To think I would have to wait around to save for a down payment on a house, plus another $60k, is borderline absurd, and doesn't make any sense given the limited information provided.

This. So much this.

Although OP didn't say he was miserable, his question strongly implies that he'd like to do someone else. I think we all know at least one biglaw associate that wants to do something else because they are miserable in their job.

I'm not from NY, so can't speak to real estate prices there. But in the Bay Area, it just isn't practical to expect to buy anything other than a 1BR condo for $650k. I'm not saying its always impractical to buy property (someone that wants to do PI in the Midwest, for example, would probably be advised to save up enough to buy a home), but I am saying that saving enough to buy a house plus another $60k isn't great advice for everyone because there really is no answer that will be good for everyone.

ruski wrote:the reality of the situation is someone working in PI will not be able to save anything. owning property is a savings mechanism as you pay down the principal and build equity. in several areas the renting price is around equal to the mtg + maintenance amount. so if you can use the biglaw salary to buy property, then quit, your monthly living expenses will be the same except you're also saving over the long term.